Measuring Utility Changes in Monetary Terms via Quasi-Linear Preferences
A highly practical application of quasi-linear utility functions arises in models of workers who value both free time and the various goods they can purchase with their earnings. In such scenarios, if the worker can sell their output (e.g., grain) in a market, then all consumption goods can be aggregated and valued in a single unit: money income. By modeling preferences as quasi-linear, with money income as the linear component, any gains or losses in overall utility resulting from changes in consumption, free time, or both, can be directly measured in monetary terms.
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